Breaking: iPhone 3G is subsidized; no more iTunes activation?

iPhone Atlas has received word that the iPhone 3G will indeed be subsidized by wireless carriers including AT&T, enabling the $199 and $299 price tags for 8GB and 16GB phone models, respectively.

We're not sure yet what this means for the purchase and activation process. Previous iPhones were bought in-store at AT&T or Apple retail outlets, or from Apple's online store then activated at home. With subsidization, however, activation may be necessary to purchase the phone in the first place, potentially obviating an in-home, iTunes-based activation scheme.

This certainly makes the fact that neither AT&T nor Apple are currently taking pre-orders for the iPhone 3G, due to ship on July 11th, interesting.

Apple's iPhone 3G press release states that the $199 and $299 iPhone 3G prices "require new two year AT&T rate plans, sold separately."

Also of note: during Steve Jobs' keynote address this morning, the Apple CEO said that $199 and $299 would be the maximum prices for the new models. Is it possible we'll see cheaper iPhones with higher subsidies from other wireless carriers?

UPDATE: An AT&T press release says that a previously extant revenue-sharing model under which AT&T shared a portion of monthly service revenue with Apple, further evidencing a switch to a subsidized model.

The press release also states only that the iPhone will be available at its retail stores, making no mention of online ordering.